The deposit is the first major financial hurdle for most property buyers. But how much do you actually need — and is the answer always 20%? This guide breaks down the real deposit requirements for buyers in 2026, including low-deposit options, government schemes, and what lenders actually require versus what is ideal.

The Standard Answer: 20%

The widely cited benchmark is a 20% deposit. On a $800,000 property, that is $160,000 in savings before you start adding stamp duty, legal costs and inspection fees.

The reason lenders prefer 20% is simple: it means you are borrowing 80% of the property’s value (an 80% loan-to-value ratio, or LVR). At 80% LVR or below, you avoid Lenders Mortgage Insurance (LMI) — a significant additional cost that protects the lender (not you) if you default.

What Is Lenders Mortgage Insurance (LMI)?

LMI is a one-off insurance premium charged by lenders when your deposit is less than 20% of the purchase price. LMI does not protect you — it protects the lender if you default and the sale of the property does not cover the outstanding loan. Despite protecting only the lender, the borrower pays the premium.

LMI can add $10,000-$30,000+ to the cost of a purchase depending on the loan amount and LVR. On a $750,000 property with a 10% deposit ($75,000), LMI may add $15,000-$20,000 to your acquisition costs.

Can I Buy With Less Than 20%?

Yes — many buyers do. Here are the main options:

1. Low-Deposit Home Loans (5-10% Deposit + LMI)

Most major lenders will approve loans with as little as 5-10% genuine savings, subject to meeting serviceability criteria. You will pay LMI, which adds to your upfront or ongoing costs depending on how it is structured.

2. First Home Guarantee (Federal Government Scheme)

The First Home Guarantee allows eligible first home buyers to purchase with as little as a 5% deposit without paying LMI. The federal government guarantees up to 15% of the loan to the lender. Places are limited each financial year. Income and property price caps apply.

3. Family Home Guarantee

Eligible single parents can purchase with as little as a 2% deposit under the Family Home Guarantee, with the government guaranteeing up to 18% of the property value. Income and price caps apply.

4. Guarantor Home Loans

A family member (usually a parent) uses equity in their own property as additional security for your loan. This can allow you to borrow 100% of the purchase price without paying LMI, provided the guarantor has sufficient equity and meets the lender’s requirements.

What Are the Full Upfront Costs Beyond the Deposit?

Many buyers focus on the deposit and forget the additional upfront costs that come on top of it. A complete budget should include:

Cost	Typical Amount	Notes
Deposit	5-20% of purchase price	Held in trust until settlement
Stamp Duty	$0-$55,000+ depending on state and price	Due at settlement, paid from savings
Conveyancing / Legal	$1,500-$3,000	Solicitor or conveyancer fees
Building and Pest Inspection	$400-$800	Strongly recommended before any offer
Loan Application Fees	$0-$1,000	Varies by lender
LMI (if applicable)	$5,000-$30,000+	Applies when deposit is below 20%
Moving Costs	$1,000-$5,000	Varies by distance and volume

Deposit Planning — How Long Will It Take?

The time it takes to save a deposit depends on your income, savings rate and the property price you are targeting. As a general rule, at a 20% savings rate on a combined household income of $150,000 (approximately $30,000/year in savings), reaching a 20% deposit on a $800,000 property ($160,000) takes approximately 5-6 years — without accounting for rising property prices during the savings period.

This is why government schemes that allow entry with a 5% deposit are significant for first home buyers in major cities where prices have grown faster than incomes.

How a Property Advisor Helps With Deposit Planning

A Collings Property Advisor can help you:

• Work out the total acquisition cost for any target property including stamp duty, LMI and upfront costs
• Assess whether a low-deposit entry makes sense versus waiting to save a full 20%
• Identify suburbs where your target deposit gets you the best value in the current market
• Prepare an offer and negotiation strategy once you are ready to buy

Frequently Asked Questions

Is it better to wait and save a 20% deposit or buy now with 10%?

This depends on the market trajectory, your income stability and the LMI cost versus projected price growth. In a rising market, the cost of waiting can exceed the cost of LMI. In a flat or falling market, waiting to save a larger deposit may be the better strategy. A Collings Property Advisor provides an independent assessment of this trade-off based on current market data for your target suburb.

Does my deposit need to be genuine savings?

For most lenders, yes — at least 5% of the purchase price needs to be demonstrated genuine savings (typically held in a bank account for at least 3 months). Gifts from family, inheritance or other lump sum receipts may or may not qualify as genuine savings depending on the lender’s policy. Speak with a mortgage broker to confirm what counts as genuine savings for your situation.

Can a property advisor help me calculate what I can afford?

Yes. A Collings Property Advisor provides total acquisition cost modelling as part of the advisory service, so you know exactly what a target property will cost from deposit through to settlement — including stamp duty, LMI, conveyancing and all upfront costs.

Why Collings Property Advisory?

Collings combines deep market expertise with GeeVee AI property intelligence to give buyers the analytical and strategic edge they need to make sound property decisions — from initial deposit planning through to negotiation and settlement.

Fixed fee: $4,500 + GST. No commissions. No surprises.

Contact us today: collings.com.au/portal